The applicant, Mr Rumen Ivanov Todorov, is a
Bulgarian national who was born in 1960 and lives in Ahtopol.

A. The circumstances of the case

The facts of the case, as submitted by the applicant,
may be summarised as follows.

On 11 May 1990 the applicant obtained construction
rights over a plot of municipal land in Rezovo, the municipality of
Tsarevo (formerly Michurin). In accordance with the relevant law as
in force at the time, the municipal authorities issued an order granting
construction rights and also entered into a contract with the applicant.
The surface of the plot was 700 square metres. The price was set at
700 Bulgarian levs (“BGL”), which the applicant paid on 14 May 1990.
At that time BGL 700 was the equivalent of, approximately, three average
monthly salaries in the country.

The contract stipulated, inter alia, that the applicant’s right to construct a building
would expire in the event of him failing to terminate the building within
five years.

The applicant hired an architect and on 19 July
1991 he obtained a building permit for a two-storey 111 square metres
house to be constructed on the plot. The applicant also purchased construction
material, transported it to Rezovo and stored it there.

On an unspecified date in the summer of 1991
the municipal building authorities refused to authorise the commencement
of the construction works as the technician who had visited the site
had noted that a high-voltage electricity conduit passed over the plot.

It appears that during the same period persons
claiming rights over neighbouring plots obstructed the applicant’s
preparations for the construction of his house. In 1992 the applicant
brought an action against them, seeking damages. The municipality of
Tsarevo was summoned as a third party. By judgment of 2 March 1993 the
Bourgas District Court dismissed the applicant’s claim against the
neighbours, noting that the impossibility for the applicant to realise
his project was only imputable to the municipality which had sold him
construction rights over the plot in disregard of the fact that constructing
a building there was not allowed owing to the passage of a high-voltage
electricity conduit.

On an unspecified date in 1993 the applicant
wrote to the municipality asking them to provide him with another plot.
He allegedly received assurances that that would be done later.

In October 1995 the applicant travelled to Germany
and started work there.

On 29 January 1996 the mayor of Tsarevo issued
an order cancelling the applicant’s construction rights.

The applicant learned about the order in the
summer of 1996, when he returned from Germany. On an unspecified date
his wife’s attempt to appeal against it was rejected as being out
of time.

On an unspecified date in 1997 the applicant
brought an action against the municipality of Tsarevo seeking restitution
of the price paid by him under the 1990 contract and damages for breach
of contract. Initially he claimed BGL 100,000. On 31 March 1998 he increased
the claim to BGL 1,000,000.

By judgment of 27 July 1998 the Tsarevo District
Court granted the claim partially. Upon the applicant’s appeal, on
24 March 1999 the Bourgas Regional Court increased the award. The final
judgment was that of the Supreme Court of Cassation of 15 May 2000 which
upheld the Regional Court’s judgment.

The courts found, inter alia, that the Tsarevo municipality had breached the
1990 contract with the applicant in that it had granted him construction
rights over a plot which could not be built over and had failed to remedy
that situation despite his complaints. It followed that the municipality
was liable to pay all ensuing damages. The applicant had proven the
alleged losses in respect of the price paid by him in May 1990 to the
municipality (BGL 700), the architect’s fees paid by him in 1991 (BGL
1,200) and the expenses made by him in 1991 for the transport of construction
material (BGL 8,000).

The remainder of his claims, which concerned
alleged loss of gains, was dismissed as unproven. The applicant had
stated that in normal circumstances he would have completed the house
within a year and would have rented it each year during the summer holidays.
The courts found that the applicant had not substantiated the alleged
loss of gains. He had relied solely on information about the average
property and rental prices at the relevant time.

The amount awarded to the applicant was thus
BGL 9,900 plus interest. Owing to the depreciation of the Bulgarian
currency, as of March 1999, when the award became enforceable, it represented,
together with all interest accrued, the equivalent of not more than
EUR 15.

In his appeals before the Regional Court and
the Supreme Court of Cassation the applicant protested that the courts
awarded him sums which had become worthless. He insisted that the award
should be commensurate to the value of the actual damage he had sustained.

In reply to those arguments the courts stated
that in accordance with the relevant law the applicant was entitled
to compensation for the actual damage suffered at the time when it was
occasioned.

B. Relevant domestic law

In accordance with the relevant law, the right
to construct a building is a right in rem. The holder becomes the owner of the building, while
the land remains the property of its original owner.

In accordance with section 67 of the Property
Act the right to construct a building expires – and the owner of the
land recovers full ownership rights – if the construction is not completed
within five years.

COMPLAINTS

1. The applicant complains, relying on Article
6 and Article 1 of Protocol No. 1 of the Convention, that he suffered
damage imputable to the State but was only given a token compensation,
as the courts did not take into consideration the monetary depreciation
in the country.

2. The applicant also complains that the order
of 29 January 1996 of the mayor of Tsarevo, cancelling his right to
construct a building, was unlawful.

3. The applicant complains, relying on Article
6 and Article 1 of Protocol No. 1 of the Convention, that the courts
wrongly dismissed his claims for damages in respect of alleged loss
of gains.

THE LAW

1. The applicant complains, relying on Article
6 and Article 1 of Protocol No. 1 of the Convention, that he suffered
damage imputable to the State but was only given a token compensation,
as the courts did not take into consideration the monetary depreciation
in the country.

The Court considers that it cannot, on the basis
of the case file, determine the admissibility of this complaint and
that it is therefore necessary, in accordance with Rule 54 § 2 (b)
of the Rules of Court, to give notice of this part of the application
to the respondent Government.

2. The applicant complains that the mayor’s
order of 29 January 1996 was unlawful and in breach of Article 1 of
Protocol No. 1 of the Convention.

The Court observes that the applicant did not
appeal against the order and that his wife’s appeal was rejected as
inadmissible. In these circumstances, the Court finds that the applicant
has failed to exhaust all domestic remedies within the meaning of Article
35 § 1 of the Convention. It follows that the above complaint must
be rejected in accordance with Article 35 § 4 of the Convention.

3. The applicant also complains, relying on Article
6 and Article 1 of Protocol No. 1 of the Convention, that the courts
dismissed his claim for damages in respect of loss of gains and accepted
as proven only a portion of his claims.

The Court reiterates that, according to
Article 19 of the Convention, its duty
is to ensure the observance of the engagements undertaken by the Contracting
Parties to the Convention. In particular, it is not its function to
deal with errors of fact or law allegedly committed by a national court
unless and in so far as they may have infringed rights and freedoms
protected by the Convention. Moreover, while Article 6 of the Convention
guarantees the right to a fair hearing, it does not lay down any rules
on the admissibility of evidence or the way it should be assessed, which
are therefore primarily matters for regulation by national law and the
national courts (see Schenk v. Switzerland, judgment of 12 July 1988, Series A no. 140,
p. 29, §§ 45-46) and Garcia Ruiz v. Spain [GC], no. 30544/96, § 28, ECHR 1999-I).

In the present case, the domestic courts found
that the applicant had not proven his claims in respect of alleged loss
of gains. On the basis of the material before it, the Court does not
consider that the domestic courts acted arbitrarily or otherwise in
breach of Article 6 or Article 1 of Protocol No. 1 to the Convention
when assessing the evidence adduced by the applicant in the domestic
proceedings.

It follows that this complaint is manifestly
ill-founded and must be rejected in accordance with Article 35 §§
3 and 4 of the Convention.

For these reasons, the Court unanimously

Decides to adjournthe examination of the applicant’s complaints concerning
the alleged inadequate compensation for the damage occasioned by the
Tsarevo municipality;